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Custom Installed A/V Offered By More Builders, Says CEA/NAHB

A growing percentage of new-home builders has begun to offer custom installed audio/video systems, and the adoption rate by new-home buyers has grown as well, according to a new study completed by the Consumer Electronics Association (CEA) and the National Association of Home Builders (NAHB).

The associations’ fourth annual State of the Builder Technology Market study found 74 percent of builders who offered home technology in 2005 offered multiroom audio as a standard or optional installation, up from 68 percent in 2004 and 56.8 percent in 2002. A total of 69 percent offered installed home theater systems in 2005, up from 59 percent in 2004 (see table 1 below and table 2 on p. 52).

The survey of hundreds of builders nationwide was conducted early this year.

The latest survey also found that builders selling home technology increased their sales of all home technologies but structured wiring, which was offered by fewer builders in 2005 and whose installation rates likewise declined. Structured wiring’s decline, the study speculated, might be attributable to “the plethora of inexpensive wireless networking technologies.”

With more builders marketing custom-installed A/V systems, new-home installation rates continue to rise.

Surveyed builders who offer home technologies installed multiroom audio systems in 15 percent of the homes they built in 2005, up from the previous year’s 12 percent, which in turn was up from 8.6 percent in 2002, the CEA/NAHB survey found (see table 3 on p. 52).

Home theater install rates rose to 11 percent in 2005 from the previous year’s 8 percent.

Rates are rising, according to the study, because builders realize that home technologies are important to successfully market new homes. The overwhelming majority of all surveyed builders — 86 percent — agreed that home technologies are very important or somewhat important to marketing homes, the study said. That’s up from 79 percent in the early-2005 survey and 66 percent in the early- 2004 survey. Only 14 percent called technology not important at all, down from the previous survey’s 21 percent.

The percentage of all builders calling technology very important is on the rise. A total of 27 percent called technology very important to selling a new home, up from the previous year’s 10 percent.

A third of builders who install home technology believe home technology not only helped them sell new homes but also boosted their revenues in 2005, the early-2006 survey found. That percentage is up from the 25 percent and 20 percent who responded that way during the previous two years.

Builders offer a variety of reasons for offering home technologies, ranging from a simple need to compete to differentiating their business to boosting profits. Many builders also indicate that the home buyer or architect is asking for the technologies.

Among all home technologies, multiroom audio packs the most profit-building potential in the eyes of builders. Among surveyed builders offering home technologies, 46 percent cited multiroom audio as boosting profit potential, followed by home theater, automated lighting controls and monitored security, which were each cited by 40 percent. Structured wiring was cited by only 28 percent of those surveyed.

Builders “are becoming more involved with home technologies as a means to compete and differentiate themselves,” the study said. “And to compete effectively, many builders have reached out to somewhat nontraditional partners. This year we see evidence of new-home builders working more closely with custom installers, retailers and service providers to collaborate on offerings and installations These specialists are better equipped to guide builders on which technologies can best boost their profits. Perhaps this is why this year we see a shift in the types of home technologies offered and installed by new home builders.”

The survey also found that consumers seem willing to spend more than ever for custom A/V systems. The typical price of a multiroom audio system rose in the latest builder survey to $2,500 from $1,300 in the previous survey. Typical home theater prices jumped to $6,200 from $4,800. Lighting control prices rose on average to $6,100 from $5,500, and monitored security rose to $1,400 from $1,100. (See table 4)

“These increases,” the study concluded, “could be a function of larger jobs, increased labor costs, or better materials and equipment.”

What Builders Offer*

Percent of Builders Offering Select Technologies* (2002-2005)

Typical Installation Prices to Consumer*

Technology Installation Rates In New-Home Construction* (2002-2005)